Cost, construction type, and the labor package — District of Columbia

A real per-square-foot cost ceiling -- published in the annual RFP, not the QAP

The QAP tells applicants only that "[c]ompliance with DHCD Cost and Funding Guidelines" is scored (up to -5 points for exceeding the guideline) and that Underwriting Guidelines "include construction cost, soft cost, and operating cost guidelines that are updated periodically and will be specified in the Consolidated RFP, online application, or Underwriting Guide." The actual numbers appear in DHCD's FY2026 Consolidated RFP, published as a maximum construction cost per square foot, scaled by building height and structural type.

The same RFP sets a parallel Maximum Operating Cost Guideline: "Project operating expenses ... should be no more than $12,900 per unit per year," with in-unit owner-paid utilities deducted from that figure and common-area utility costs counted inside it. Both the construction-cost and operating-cost guidelines carry the identical scoring consequence -- "[o]ne (1) point will be deducted per each 5% increment over the DHCD maximum construction cost, soft cost, or operating cost guideline" -- meaning a cost overrun is a scored penalty in DC's system, not an automatic Threshold failure the way an unwaived overage is in some other states' QAPs.

Contingency and contractor fee caps

Developer fee: one formula since 2016, plus a tighter per-unit schedule whenever HPTF money is in the deal

DHCD's general developer-fee formula has not changed in substance since a November 17, 2016 policy memo removed the program's prior flat dollar cap. The FY2026 Consolidated RFP restates the same structure: "Developer Fee: 5% of Acquisition Costs, if applicable, plus 15% of Non-Acquisition Fee Basis (equal to Total Development Costs less Guarantees and Reserves, LIHTC Syndication and Bond Financing-Related Costs, Acquisition Costs, and Construction, Soft Cost, and Financing Contingencies). ... Any fee in excess of $2 million shall be deferred up to the amount that can be recovered from cash flow over 12 years of operations. Amounts that cannot be repaid during this period will be added to the initial $2 million paid fee." The 2016 memo's own restriction on identity-of-interest deals still applies on top: "if an identity of interest between the developer and construction contractor [exists], contractor profit and overhead is considered together with the developer fee subject to the overall cap of 18 percent on development costs."

But that general formula is not the only developer-fee rule a DC applicant will run into. The current Housing Production Trust Fund New Construction Term Sheet (v1.1, 3/13/2026) -- the gap-financing tool paired with most competitive 9% awards -- imposes its own, more granular per-unit schedule for the paid portion of the fee, disbursed on a fixed milestone schedule, plus a longer deferred-fee recovery window than DHCD's general 12-year rule. The term sheet is explicit that its own limit does not override the QAP's: "Under no circumstance may total developer fee exceed the limits outlined in the Qualified Allocation Plan (QAP) in effect."

Green building: DC's citywide Act, DHCD's own mandatory tier, a separate scored tier, and a Net Zero mandate in legislative limbo

DC was the first U.S. city to mandate green building certification for both public and private construction, under the Green Building Act of 2006 (D.C. Law 16-234, effective March 8, 2007; DC Official Code Section 6-1451.01 et seq.). The Act's general private-sector threshold -- LEED Certified or higher for new private development of 50,000 square feet or more -- is a floor DHCD's own LIHTC program sits well above. The QAP's Threshold Eligibility Requirements make green certification mandatory ("apply to all Projects for which public financing constitutes 15 percent or more of Total Project Costs. Public financing includes the private equity raised through the syndication of LIHTCs") -- a trigger broad enough to reach essentially every LIHTC deal, since LIHTC equity alone will routinely clear 15% of total project cost.

On top of that Threshold tier, DHCD's QAP separately requires, as a flat mandatory condition rather than a scored bonus: "All Projects must install solar panels or submit a waiver for this requirement if solar panels cannot be installed on the building." And beyond the mandatory tier, the QAP scores up to 20 additional points under "Resilient Buildings and Innovative Design" for projects that go further -- pursuing Enterprise Green Communities Certification Plus itself where it isn't already required, TRUE Zero Waste Certification, a Whole-Building Life-Cycle Assessment for low-embodied-carbon design, mass-timber or modular construction (or office-to-residential conversion), all-electric buildings with no on-site combustion, or specific named Enterprise Green Communities criteria (5.3 Advanced Building Performance; 6.5 Material Selection). That scored layer is explicitly distinct from, and additional to, the mandatory Threshold-level certification -- the QAP describes it as available to "Projects that exceed the minimum Green Building Design and Construction Threshold Requirements."

A further, higher tier applies to any project drawing Housing Production Trust Fund financing: the current HPTF New Construction Term Sheet requires certification with "the current version of ... Enterprise Green Communities or LEED v4 (Gold or Platinum)" -- a materially higher bar than the QAP's own base Threshold requirement of Enterprise Green Communities or LEED Silver.

Layered on top of all of this is a Net Zero Energy mandate that has been in active legislative flux since 2023. Section 3(a)(3)(C) of the Green Building Act (DC Official Code Section 6-1451.02(a)(3)(C)), as amended by the Greener Government Buildings Amendment Act (D.C. Law 24-306), requires District- or District-instrumentality-financed residential projects of at least 10,000 square feet of Gross Floor Area, selected for funding after April 30, 2025, to "maintain net zero energy compliance." DHCD's own QAP text states plainly that this requirement is currently paused: "As of December 2, 2025, temporary legislation has been passed that suspends the Net Zero Energy requirements for projects that apply for funding" -- a reference to the Green Housing Coordination Temporary Amendment Act of 2025 (passed on second reading December 2, 2025, Engrossed version of Bill 26-0375), itself the latest in a series of emergency and temporary amendments reaching back to the Green Housing Transition Emergency/Temporary Amendment Acts of 2023 and the Green Housing Coordination Emergency Amendment Act of 2024. DHCD's own QAP flags the instability directly: "DHCD will issue updated guidance or amendments to this QAP as warranted." A project team should confirm the Net Zero Energy requirement's live status directly with DHCD/DOEE at the time of application rather than relying on this or any other secondary summary of an actively moving target.

Labor: DC doesn't need its own "little Davis-Bacon" -- but the 9% credit itself is carved out of the one that applies

Because the District of Columbia is not a state, it does not need a separate, state-enacted prevailing-wage statute modeled on the federal Davis-Bacon Act the way most states do -- the federal Act already reaches DC directly, by its own text. The Davis-Bacon Act requires prevailing wages on "every contract in excess of $2,000, to which the Federal Government or the District of Columbia is a party, for construction, alteration, or repair of public buildings and public works" -- DC is named in the statute itself, not folded in through a state-level adoption. The Act is codified today at 40 U.S.C. Section 3141 et seq. (recodified there in 2002); DHCD's own current Consolidated RFP compliance table still cites the older, pre-2002 codification ("40 USC §§276a-276a-5"), which is worth knowing if cross-checking against a more recent federal source.

The practical LIHTC question is not whether Davis-Bacon reaches DC -- it does -- but which DHCD funding sources trigger it on a given deal. DHCD's own materials state the rule directly, and carve out one specific exception: "Davis Bacon prevailing wage rates apply to all development subsidy sources offered through this RFP except for 9% LIHTCs." The QAP's own version of the same rule lists the federal and local sources that do trigger it: HOME, CDBG, HTF, STORM, a HUD 542(c) Risk Share loan, or an Annual Contributions Contract (ACC) on the federal side; the Housing Production Trust Fund (HPTF) and the Local Rent Supplement Program (LRSP) on the local side. Because most competitive 9% awards in DC are paired with HPTF or another listed gap-financing source, the practical result is that most real 9% deals end up Davis-Bacon-covered anyway -- just through their companion subsidy, not through the tax credit itself. A pure 4%/bond deal with no DHCD or HUD subsidy layered in, financed solely by DCHFA tax-exempt bonds, is not on the QAP's own trigger list either; this research did not independently confirm whether DCHFA's own Mortgage Revenue Bond Program guidelines impose prevailing wage requirements of their own on that narrower category of deal, and that should be confirmed directly against DCHFA's current MMRB program documents.

A separate, genuinely distinct DC wage law sits alongside Davis-Bacon: the Living Wage Act of 2006 (DC Official Code Sections 2-220.01 through 2-220.11). Unlike Davis-Bacon's trade-by-trade prevailing wage schedules, the Living Wage Act sets a single flat hourly floor for a broader category of workers, and its trigger is financial rather than construction-specific: it applies to DC government contractors and to "recipients of government assistance" of $100,000 or more, and to subcontractors receiving $15,000 or more of those funds. Because HPTF financing is itself DC government financial assistance, an HPTF-funded LIHTC deal is very likely within the Living Wage Act's scope in addition to Davis-Bacon's. The rate is reviewed annually by DOES against the Washington metro area's CPI-W: $17.95/hour from January 1, 2026 through June 30, 2026, rising to $18.40/hour on July 1, 2026 alongside DC's minimum-wage increase. In practice, Davis-Bacon's trade-specific prevailing wage rates for DC-area construction trades will typically exceed this flat floor for on-site construction labor, so the Living Wage Act's independent bite is likely to matter most for workers on the same contract who fall outside Davis-Bacon's construction-trades coverage (e.g., property management or resident-services staff) -- a reasonable inference from how the two statutes' scopes differ, not something this research found stated as such in a single DHCD document, so a project's specific overlap should be confirmed with DOES or counsel.

Several further labor and hiring rules apply on top of wage requirements. Section 3 of the Housing and Urban Development Act of 1968 applies to LIHTC-assisted projects with HUD or DHCD funds triggering it, and DHCD's QAP states it applies "to the whole Project" once triggered. The First Source Program (DC Official Code Sections 2-219.01 et seq.), in effect since 1984, requires that "51% of all new hires" on DC-financed development go to District residents. Unlike Davis-Bacon, apprenticeship registration is not carved out for 9% deals: "All recipients of LIHTC must register their project with the apprenticeship program, housed in DOES" -- both 9% and 4% awards. And Build America, Buy America (2 CFR Part 184, under the Infrastructure Investment and Jobs Act) applies to LIHTC projects combined with the same federal/local funding sources that trigger Davis-Bacon, imposing domestic-content requirements on iron, steel, and manufactured products rather than a wage floor.